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. Last Updated: 07/27/2016

A Minister's Big Promotion

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President Vladimir Putin took decisive action last week in response to a petition for the dismissal of Defense Minister Sergei Ivanov: He put him in charge of a commission that will oversee military procurement. I have little doubt that this latest appointment is part of the battle between Kremlin clans that has been raging for several months.

Ivanov was made a deputy prime minister last November and immediately announced his desire to take charge of military procurement, including an interagency defense industry commission. But Ivanov had jumped the gun. A few weeks later, Prime Minister Mikhail Fradkov quietly issued a directive on the distribution of powers within the Cabinet that left him in charge of military procurement.

Four months later, Ivanov struck back. Putin signed a decree creating a new and improved defense industry commission that would operate on a full-time basis, unlike its predecessor. As head of the commission, Ivanov has even been assigned a deputy at the ministerial level. Putin hastened to tell reporters that he would not be reporting to Fradkov. Obviously, the other members of the commission will not report to Fradkov either.

For all the importance of Ivanov's latest promotion, it will only expand the scope of his incompetence, as demonstrated during his recent trip to Siberia as the newly installed head of the defense industry commission. On a visit to the Chkalov Aircraft Production Association in Novosibirsk, Ivanov outlined his plans for rearming the armed forces: "Two Su-34 aircraft will be purchased in 2006, followed by six more in 2007, 10 in 2008, and so on," Ivanov said. "Thus, by 2010 we will have purchased an entire air regiment of Su-34 aircraft, a total of 24 planes." Ivanov added that the defense industry budget in the Novosibirsk region would triple to some $100 million.

The history of the Su-34, an advanced two-seat fighter-bomber and strike aircraft, highlights the problems that plague the defense industry. Contrary to Ivanov's claims, the Su-34 is hardly a new plane. It is a variation on the Su-27 fighter, which went into production in the early 1980s. The Su-34 itself first flew in 1993. This means that the Air Force will have to wait another four years for its first air regiment of a fighter that will be out of date before full-scale production even begins. And the military needs to replace 10 air regiments of front-line Su-24 attack bombers. If procurement continues at this pace, the Air Force won't receive its full complement of Su-34 fighter-bombers until mid-century, by which time the planes will be hopelessly obsolete.

The defense industry is simply incapable of developing and producing state-of-the-art military hardware. The best it can do is to update Soviet-era designs to meet today's demands. This is the price that the military pays for pretending that it is still capable of producing the entire spectrum of weapons and hardware, from pistols to ballistic missiles. As a result, despite a sizeable overall outlay, the government cannot ensure a steady flow of new hardware. Small-scale production sends production costs through the roof. If only two Su-34 aircraft are built each year, they run about $35 million a piece, or two-thirds of the total funding allocated for defense procurement from all the companies in the Novosibirsk region. Mikhail Pogosyan, chief executive of Sukhoi Aviation Holding, said his company's normal rate of production would be 15 to 20 planes per year. In order to avoid losses, producers pad the sticker price for their planes with every conceivable cost. And this explains the steady price rise in the defense industry.

Ivanov blames producers for price gouging. He clearly believes that as head of the defense industry commission, he will be able to lean on producers: "The commission has the power to summon any director, any official, and ask what they are doing; what they're spending so much money on; when this or that program will be completed and at what cost." In a word, Ivanov sees himself as a sort of modern-day Dmitry Ustinov, whom Stalin appointed People's Commissar of Armaments in 1941. In Ustinov's day, however, factory directors didn't have to worry about profitability or the cost of raw materials. All Ivanov has proposed is to scare up a few new contracts on the side.

The only way out of the mess is for the military to concentrate its limited resources on a few essential weapons programs. Before you can decide which programs are essential, however, you need a clear plan of national defense. Ivanov failed to formulate such a plan as secretary of the Security Council and as minister of defense. There's no reason to think he will succeed now as head of the defense industry commission.

Alexander Golts is deputy editor of the online newspaper Yezhednevny Zhurnal.